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Netflix

...because it is the king of online video distribution. The company’s subscription service model provides online streaming both domestically and internationally on multiple devices, while the original delivery arm sends DVDs – those shiny round discs that play movies – by mail. Whether it’s that acclaimed documentary everyone tells you to watch, a dozen Nicolas Cage movies you didn’t realize existed or the newest original series, Netflix obtains all media from studios and content providers. They also produce original content including films, series, animation and documentaries, making them a one stop shop for digital entertainment.



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According to CEO Reed Hastings, the Netflix model was born from taking advantage of viewers' "managed dissatisfaction" with traditional media models - commercials and promotions during viewing, waiting for future episodes in a series, having to wait till a set day and time to access your content and dealing with availability and late fees when renting. Netflix foregoes these tropes, and instead allows viewers to pick and choose when and how to view their content from the comfort of their homes, without commercial interruption. Viewer control is key to the Netflix experience, with trends such as "binge-watching" emerging through their model.

Netflix has a unique approach to their original content, one that is possible due to their subscription and distribution model. Original series do not need to accommodate for commercial breaks or mid-episode promos and teasers because the subscription fee removes the need for advertising, and the release of all episodes of a season at once allow users to continue viewing a series uninterrupted and without the need for a recap or preview of what's to come. Creators also do not need to restrict themselves to the traditional time limits imposed by broadcast, so episodes of a series can have variable run times and do not need to end on cliffhangers. Creators do not have to mold their stories to garner large viewerships all at once either, because the Netflix model allows viewers to build over time and at a pace that is comfortable for them. Thus, creators have a greater degree of artistic freedom when compared to working for a broadcast network.

Netflix was established in 1997 around two emerging technologies - DVDs and a website to order them from. Quickly surpassing traditional brick and mortar rental stores in sales, Netflix would go on to provide a streaming content service to personalized computers in 2007, all but cementing themselves as the king of content distribution. With over 60 million subscribers in more than 40 countries worldwide and growing, while accounting for over 30% of all down-streaming traffic in North America during peak viewing hours, Netflix has introduced and refined a model for content distribution that is quickly becoming the norm. HBO, CBS and Sony have all begun to introduce similar distribution models for their content, and more and more networks and studios are sure to do the same.

Seeing online and digital as the future of media distribution long before it became commonplace, Netflix offered 49% of their company to rival Blockbuster to serve as the then rental giants online branch. Blockbuster, not yet seeing the threat to their business that digital would become, declined. The rest is, as they say, history, with Netflix becoming one of the biggest content distributers of all time and Blockbuster filing for bankruptcy.

"What makes marketing Netflix unique is that people have to make a behavior change," said Leslie Kilgore, former Netflix CMO. In order to allow users to become familiar with the unique way Netflix provides content, the service offers a free, non-restricted trial service which has yielded an impressive 90% conversion rate. Netflix has shied away from traditional, big money marketing of its product, mostly foregoing expensive television spots, digital and print media advertisements. Instead, they have relied heavily on word of mouth and unique partnership deals to reach consumers. The Netflix app comes standard on numerous digital streaming devices like Chrome Cast and Playstation, allowing new users to become introduced to the service. Content advertised as "now available on Netflix" has also provided exposure for the service.

Netflix has made numerous unique agreements with major networks and studios to build its streaming library. Fixed fee licenses, revenue sharing agreements and direct purchases of content from partners such as Disney, Starz, Fox and CBS have been mutually beneficial for all parties, with many networks utilizing Netflix as an additional revenue stream for their older properties and as a promotional tool for their in production series. Major production companies have also worked in tandem with Netflix, with Adam Sandler and Brad Pitt both producing exclusive content for the service via their respective studios, and even web creators like Freddie Wong, Smosh and Felicia Day having brought their content to the streaming service.

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